Companies use volunteers for various reasons. For example, nonprofit charities regularly put countless volunteers to work in connection with their programs. Even for-profit entities frequently offer unpaid internships or externships to eager candidates trying to learn a particular skill, make business connections, or add a relevant experience to their resume.
If your company is using volunteers or considering doing so, there are certain interests that you might want to protect, even from those who are contributing services to your business free of charge. On the one hand, you don’t want to offend or alienate people supporting your business in any way, particularly if they’re doing so without being paid. This article, however, discusses certain topics you might want to address, even with respect to volunteers. If any of the matters below are of particular importance to you, then either you or your legal counsel should prepare a standard agreement for each volunteer to sign and return (the Volunteer Agreement).
It’s pointless to have a volunteer sign a contract that can’t be enforced. In order to be legally binding, every contract needs both parties to receive something of value, often referred to as consideration (see Consideration: Every Contract Needs It). This is usually a non-issue, because most contracts involve the exchange of cash for either a good, a service, or a right. However, because volunteers aren’t paid, your contract must first establish that they’re receiving some benefit in exchange for their services.
As an illustration, here’s a description of the consideration received by volunteers who worked for a for-profit life coaching business:
“The Parties hereby acknowledge and agree that the Volunteer shall derive substantial benefits from the Volunteer’s performance of the Volunteer Services, including, but not limited to, (i) administrative and support training in a professional environment, (ii) marketing experience, (iii) complimentary attendance at Company events, and/or (iv) training in writing skills and other creative disciplines.”
Feel free to be thoughtful and creative when preparing this section of the agreement. Your description of the benefits derived by the volunteer should be as detailed, expansive, and substantive as possible, which will make it easier to demonstrate that the parties have validly exchanged valuable consideration in good faith.
As with regular employees, volunteers commonly have access to your company’s non-public, confidential information that your company might want to protect, for numerous reasons. Even nonprofit entities have incentives to protect their confidential information (for example, customer lists, suppliers, financial information, employee data, know-how, processes, and so forth) from being misappropriated by the private sector and others.
Furthermore, your particular industry might have additional legal requirements regarding the protection of confidential information. For example, if your business is in the healthcare sector, then it might be necessary for your Volunteer Agreement to incorporate specific references to the protection of patient information under HIPAA guidelines.
For further guidance on including a nondisclosure provision in your Volunteer Agreement, see Sample Confidentiality Agreement (NDA).
It’s possible that in the course of their service, volunteers might improve or create new processes, or even inventions, that benefit your business. This is of particular concern in the technology industry, where businesses want to be 100% certain of owning all intellectual property rights connected to anything created by their personnel. If this issue is of concern to you, then your Volunteer Agreement should also include a proprietary rights provision whereby your volunteers automatically (and irrevocably) assign to your company all intellectual property rights that might attach to their work product. For further information on this topic, see How to Protect Your Intellectual Property Rights in Works Created by Contractors.
Furthermore, your agreement can require volunteers to return all company property in their possession (for example, documents, equipment, keys, memos, disks, and so forth), either prior to the cessation of their services or within a certain amount of time thereafter. See Nolo’s article How to Protect Company Property in an Employee Separation Agreement for further discussion on this topic.
As with regular employees, volunteers often cultivate close, positive working relationships during their time with a company. You might be anxious that volunteers could possibly take advantage of those relationships by soliciting your employees, contractors, or other representatives after they depart. If you have any such concerns, then include a standard non-solicitation provision in your Volunteer Agreement.
Due to the unique nature of working for a company without compensation, volunteers are commonly treated as a cherished commodity; as such, one would think that they’d be less likely to disparage the company after their departure than would a regular employee. However, because no one can predict the circumstances surrounding the exit of any particular person, whether they’re a paid employee or a volunteer, feel free to include a non-disparagement provision that mirrors the guidance provided in Nolo’s article How to Protect Your Company’s Goodwill in an Employment Separation Agreement.
As with the hiring of independent contractors, your Volunteer Agreement must make it clear that volunteers aren’t considered “employees” for legal purposes, and that your company will not be responsible for paying any taxes on behalf of any volunteer. Here are some sample clauses:
Status. Nothing in this Agreement creates or shall be construed to constitute an employment relationship, partnership, joint venture, or agency relationship between the Company or its affiliates, on the one hand, and the Volunteer, on the other hand, or entitling the Volunteer to control in any manner the conduct of the business of the Company or any of its affiliates.
Tax Returns. The Volunteer shall file all tax returns and reports required to be filed by the Volunteer on the basis that the Volunteer is a volunteer rather than an employee. The Volunteer shall pay in full all applicable taxes in connection with the Volunteer’s performance of any Volunteer Services under this Agreement, including federal, state, and local income taxes. The Company shall not pay any unemployment or workers’ compensation taxes or premiums on behalf of or regarding the Volunteer.
Each of the topics above relating to prohibitions on the volunteer’s future conduct (confidentiality, assignment of proprietary rights, non-solicitation, and non-disparagement) are often collectively referred to as “restrictive covenants.” Given that volunteers work for no compensation, you’ll have to get creative in including consequences and penalties in your Volunteer Agreement that are persuasive enough to motivate the volunteer’s full compliance with these provisions.
If you don’t have a corporate attorney to assist you in preparing your Volunteer Agreement, then see How to Draft a Letter Agreement or an MOU and Ten Tips for Making Solid Business Agreements and Contracts for direction on how to draft your own contract.
Note that, ideally, you should have each volunteer sign your Volunteer Agreement prior to commencing any work for your business. Admittedly, presenting such an agreement to volunteers can be a sensitive topic, given that they’re donating their efforts to your company. However, always remember to present the agreement in as casual and routine a manner as possible. If necessary, simply explain that it’s a standard, administrative document that all volunteers must sign. And if things get really uncomfortable, feel free to blame it on your lawyers — that usually works.